The recent surge in gold prices has surprised not only investors but also ordinary consumers. On one hand, gold prices have surpassed 91,400 rupees in the country’s futures market and crossed the 94,000 rupees mark in the Delhi bullion market. On the other hand, analysts’ predictions have caused a stir in the market. Some experts claim that gold prices could soon reach 1,00,000 rupees, while a report by American analysts suggests that prices could drop to as low as 55,000 rupees. The question is: can gold prices really see such a significant decline?
Several factors have contributed to the rise in gold prices. Geopolitical tensions, economic uncertainty, and inflation concerns have driven investors toward safe-haven assets like gold. Trade disputes that began during the tenure of former U.S. President Donald Trump have also put pressure on the global economic system, leading to a sharp increase in gold demand.
Although gold prices are reaching new heights, several factors could cause a significant decline in the future:
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- Increase in Supply: The second quarter of 2024 saw record profits in the mining sector, leading to an increase in gold production. Global reserves have risen by 9% to 216,265 tons, with Australia and several other countries significantly increasing their production.
- Decline in Demand: Last year, various central banks worldwide purchased 1,045 tons of gold, but now it is expected that these banks may reduce or at least maintain their purchases. A recent survey by the World Gold Council revealed that 71% of central banks intend to limit their gold purchases, which could reduce demand
- Market Saturation: Mergers and acquisitions in the gold sector increased by 32% in 2024, indicating that the market may have peaked. Additionally, the recent surge in gold ETFs suggests a pattern similar to past price corrections.
According to Morningstar analysts, gold prices could decline by 38% over the next few years. If this happens, gold prices may reach 55,000 rupees per 10 grams. However, this will depend on the global economic situation, central bank policies, and geopolitical developments.
The rise or fall in gold prices depends on multiple internal and external factors. While some experts predict further increases in gold prices, others foresee a significant decline. In such a scenario, investors must remain cautious. If supply continues to rise and demand declines, gold prices could indeed drop to 55,000 rupees, but the outcome will depend on future circumstances.
For now, it is difficult to determine which prediction will prove accurate. However, one thing is certain: volatility in the gold market will persist, and investors must make informed decisions wisely.
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